Dear Sir,

I have a query on sale of under construction flat, which I booked in April 2010.

I am planning to sell this flat and after clearing bank home loan, want to invest the remaining amount in another property which will be again under construction only.

I don't have any clarity on tax liability in above situation....and will be very helpfull for me if you can give a view on the same.


Thanks & Regards

Peeyush Bansal

The excess amount you earn in this deal is Short Term Capital Gain.  This will be added to your normal income and taxed as per applicable slab.

Purchasing new property will not save tax on this income.

The Query is:I have a query on sale of under construction flat, which I booked in April 2010.

I am planning to sell this flat and after clearing bank home loan, want to invest the remaining amount in another property which will be again under construction only.

I don't have any clarity on tax liability in above situation....and will be very helpfull for me if you can give a view on the same.

Reply: What you would be selling is not any flat as such, but only the right for the allotment. It is a movable property.

Unless you wait till April 2013 (for completion of 3 years' holding) it will be short term capital gains, and you will not be eligible for the benefit of S 54F.